Addressing capacity performance risk for variable energy resources

Addressing capacity performance risk for variable energy resources

PJM’s Capacity Performance program has created new risks and opportunities for generators in PJM, shifting the calculus and complicating capacity market offer strategies. Renewable generators that have limited ability to control output during performance events face the specter of considerable under-performance penalties. Thus, renewable generators need to determine whether to participate, at what price to offer their megawatts, and how much capacity to offer and exposure to take on. Thoughtful review of available data and strong analytics can address these uncertainties and allow for robust decision-making under uncertainty.

In this Insights, the authors outline offer strategies under uncertainty and discuss a CRA-developed model to help clients determine offer strategies that incorporate uncertainty and account for complexities of the PJM capacity market.

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